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Note 12 - Geographic and Segment Information
 3 Months Ended
Nov. 30, 2016
Notes to Financial Statements  
Segment Reporting Disclosure [Text Block]
12.
              GEOGRAPHIC AND SEGMENT INFORMATION
 
Segment Information
 
The Company’s chief operating decision maker (“CODM”) is its Chief Executive Officer. The Company’s business is organized into
two
reportable segments: ZERUST® and Natur - Tec®. The Company has been selling its proprietary ZERUST® rust and corrosion inhibiting products and services to the automotive, electronics, electrical, mechanical, military and retail consumer markets for over
40
years, and more recently, has targeted and expanded into the oil and gas industry. The Company also sells a portfolio of bio - based and compostable (fully biodegradable) polymer resins and finished products under the Natur - Tec® brand.
 
The following table sets forth the Company’s net sales for the
three
months ended
November
30,
2016
and
2015
by segment:
 
    Three Months Ended
    November 30, 2016   November 30, 2015
ZERUST® net sales   $
8,084,678
     $
5,977,682
  
Natur-Tec® net sales    
1,617,345
      
1,046,755
  
Total net sales   $
9,702,023
     $
7,024,437
  
 
The following table sets forth the Company’s cost of goods sold for the
three
months ended
November
 
30,
2016
and
2015
by segment:
 
   
November 30,
2016
   % of
Product Sales*		  
November 30,
2015
   % of
Product Sales*
Direct cost of goods sold                                
ZERUST®   $
4,699,537
      
58.1%
     $
3,364,555
      
56.3%
  
Natur-Tec®    
1,213,168
      
75.0%
      
834,259
      
79.7%
  
Indirect cost of goods sold    
700,061
      
NA
      
676,609
      
NA
  
Total net cost of goods sold   $
6,612,766
      
 
     $
4,875,423
      
 
  
 
* The percent of segment sales is calculated by dividing the direct cost of goods sold for each individual segment category by the net sales for each segment category.
 
The Company utilizes product net sales and direct and indirect cost of goods sold for each product in reviewing the financial performance of a product type. Further allocation of Company expenses or assets, aside from amounts presented in the tables above, is not utilized in evaluating product performance, nor does such allocation occur for internal financial reporting.
 
Geographic Information
 
Net sales by geographic location for the
three
months ended
November
30,
2016
and
2015
were as follows:
 
    Three Months Ended
    November 30, 2016   November 30, 2015
Inside the U.S.A. to unaffiliated customers   $
5,268,999
     $
4,813,260
  
Outside the U.S.A. to:                
Joint ventures in which the Company is a shareholder directly and indirectly    
701,799
      
549,546
  
Unaffiliated customers    
3,731,225
      
1,661,631
  
    $
9,702,023
     $
7,024,437
  
 
Net sales by geographic location are based on the location of the customer.
 
Fees for services provided to joint ventures by geographic location as a percentage of total fees for services provided to joint ventures during the
three
months ended
November
30,
2016
and
2015
were as follows:
 
    Three Months Ended
   
November 30,
2016
   % of Total Fees for Services Provided to Joint Ventures  
November 30,
2015
  
% of Total Fees for Services Provided to Joint Ventures
Germany   $
203,000
      
15.4
 %   $
229,785
      
15.5
 %
Poland    
149,204
      
11.3
 %    
139,257
      
9.4
 %
Thailand    
147,455
      
11.2
 %    
223,741
      
15.1
 %
Japan    
146,037
      
11.1
 %    
130,673
      
8.8
 %
South Korea    
105,378
      
8.0
 %    
169,402
      
11.4
 %
France    
97,673
      
7.4
 %    
89,673
      
6.0
 %
Sweden    
87,061
      
6.6
 %    
72,961
      
4.9
 %
United Kingdom    
86,131
      
6.5
 %    
108,911
      
7.3
 %
Finland    
76,336
      
5.8
 %    
68,933
      
4.6
 %
Czech Republic    
70,828
      
5.4
 %    
57,553
      
3.9
 %
India    
64,535
      
4.9
 %    
80,451
      
5.4
 %
Other    
81,953
      
6.2
 %    
114,089
      
7.7
 %
    $
1,315,591
      
100.0
 %   $
1,485,429
      
100.0
 %
 
Sales to the Company’s joint ventures are included in the foregoing geographic and segment information, however, sales by the Company’s joint ventures to other parties are not included. The foregoing geographic and segment information represents only sales and cost of goods sold recognized directly by the Company.
 
The geographical distribution of key financial statement data is as follows:
 
   
At
November 30,
2016
  
At
August 31,
2016
   China   $
224,270
     $
253,931
  
   India    
12,421
      
13,645
  
   Germany    
18,024
      
—
  
   Brazil    
60,546
      
66,938
  
   United States    
8,175,442
      
8,219,955
  
      Total long-lived assets   $
8,490,703
     $
8,554,469
  
 
    Three Months Ended
    November 30,
2016		   November 30,
2015
   China   $
1,546,810
     $
679,755
  
   India    
331,610
      
278,690
  
   Germany    
118,259
      
—
  
   Brazil    
601,524
      
448,268
  
   Other    
1,133,022
      
254,918
  
   United States    
5,970,798
      
5,362,806
  
      Total net sales   $
9,702,023
     $
7,024,437
  
 
Total long - lived assets located in China, India, Germany and Brazil primarily consist of property and equipment. These assets are periodically reviewed to assure the net realizable value from the estimated future production based on forecasted sales exceeds the carrying value of the assets. Total assets located in the United States include the Company’s investments in joint ventures.
 
Sales to the Company’s joint ventures are included in the foregoing segment and geographic information; however, sales by the Company’s joint ventures to other parties are not included. The foregoing geographic and segment information represents only sales and cost of goods sold recognized directly by the Company.
 
All joint venture operations including equity in income, fees for services and related dividends are related to ZERUST
®
products and services.